How will the new Transfer costs affect you ?
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TRANSFER DUTY ON PROPERTY IN 2015/16- Finance minister announces that the new transfer costs are intended to bring relief for middle-income households.
Finance minister Nhlanhla Nene’s major announcement in his 2015 national budget speech, held on 25 February, declared that the rates and brackets for transfer duties on the sale of property will be adjusted from 1 March 2015, “to provide relief to middle-income households.
This has stirred up a flurry of mixed reactions among the public, and with good reason, as the implications for buying property in the future are as follows :
Firstly, it is good news for entry-level buyers, as the Treasury's new rules mean that there will be no transfer duties on all property acquired for less than R750 000, as compared with a threshold of R600 000 since 2011/12; and Secondly, buyers who purchase property up to approximately R2.3 million will also stand to gain with the new decreased transfer duties payable.
However, for those buyers acquiring property to the value of more than R2.3 million, the Treasury’s new rules are not so welcoming. From 1 March this year transfer duties are set to increase to R85,000, plus 11% of the property value above R2.25 million, which equates to a large chunks of cash having to be forked out now for transfer duties. This means for example, that in the future you can expect to pay as much as R277, 500 for transfer costs for a R4 million rand home.
These new transfer duties are expected to have a diverse effect on the property market, but overtime however, property experts believe that this effect will relax and gradually disappear, as the market adjusts to the new property transfer costs dispensation. see the table for the new rates proposed for 2015/2016.
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